In litigation, as in many other parts of life, timing is everything. In a post earlier this week, we discussed the issues surrounding lawsuits filed after the resolution of EEOC and state agency charges. A similar issue came before a New York federal court recently and was met with a similar outcome: a plaintiff who files a claim too late has nobody but him or herself to blame.
The Lilly Ledbetter Fair Pay Act of 2009 (“Ledbetter Act”) was passed to overrule the Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007). The Ledbetter Court had ruled that an employee is barred from bringing wage discrimination claims that the employee received less than similarly situated employees because of his or her protected status (gender, age, race, etc.) when the decisions regarding pay are made outside of the limitations period.
In response, Congress passed the Ledbetter Act to amend Title VII, the ADA, and the ADEA to extend the time for an employee to file suit, primarily by treating each paycheck as a discrete act of discrimination. The Act states:
[A]n unlawful employment practice occurs, with respect to discrimination in compensation in violation of this subchapter, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.
42 U.S.C. § 2000e-5(e)(3)(A).
In other words, the time period to bring a wage discrimination claim restarts every time the employee is paid, and an employee who later learns of discriminatory pay practices may proceed as long as any of their paychecks was received within 300 days or less of the date he or she files suit.
But what about the situation where an employee claims that he or she was demoted for discriminatory reasons, rather than being paid less than his or her similarly situated co-workers? In Davis v. Bombardier Transp. Holdings (USA) Inc., the Second Circuit concluded that the Ledbetter Act does not extend the time for filing demotion-related wage claims. Case No. 14-00289 (2d Cir. July 22, 2015).
Natasha Davis was hired as a Customer Service Agent at JFK Airport in 2002. Her title was changed in 2004 to Air Train Agent II, as she was responsible both for monitoring the computer-driven train that transports passengers between airport terminals, and, unlike Air Train Agent I’s, manually operating the train in case of emergency. Five years later, in January 2007, Davis took disability leave, ultimately having at least six eye surgeries before attempting to return to work in August 2007. At that time, Bombardier asked Davis to submit to a physical. The parties dispute whether she passed the physical, but in any event, Bombardier determined that Davis was not safe to operate the train in an emergency. Consequently, on September 1, 2007, Davis returned to work as an Air Train Agent I and, correspondingly, paid 75 cents less an hour going forward. Davis then sued her former employer for disability discrimination and retaliation on February 16, 2011, on the ground that she was demoted for illegal reasons. Notably, she did not bring a wage discrimination claim.
Bombardier argued that her complaint as time-barred, because she had waited more than 300 days (indeed, nearly three and a half years) to file suit after the September 2007 “demotion” decision was made. Davis claimed that the Ledbetter Act rendered her claim timely. The district court agreed with Bombardier and dismissed the suit.
On appeal, a unanimous three-judge panel of the Second Circuit affirmed. Agreeing with the Third Circuit, the only other circuit to have considered the issue, the court concluded that “‘the plain language of the [Ledbetter Act] covers [only] compensation decisions and not other discrete employment decisions,’ such as hirings, firings, promotions, and demotions.” Case No. 14-00289 at 9 (quoting Noel v. Boeing Co., 622 F.3d 266, 274 (3d Cir. 2010)). Unlike wage discrimination, the court explained, an employee who has been demoted is immediately aware of the decision and its corresponding loss in pay, and the employee can therefore seek out an explanation from his or her employer. Consequently, because the decision that Davis was challenging was her “demotion,” rather than the decision to pay her less, her claims were time-barred.
As in the situation where an employee fails to update his or her address with the EEOC and misses the 90-day deadline for filing suit after an administrative charge is resolved, employees are also under a duty to bring suit promptly when they have notice of any potentially illegal decrease in wages. Employers, in particular, benefit from being able to efficiently determine the limits of the timeframe for which they may face potential exposure in litigation.